By Karin Strohecker and Colleen Goko
WASHINGTON/JOHANNESBURG (Reuters) -Angola anticipates finalizing a debt-for-development swap with the World Bank before June, a senior debt management official said this week on the sidelines of the International Monetary Fund and World Bank annual meetings in Washington.
“We are working with the World Bank on a debt-for-development swap, which is something that will diminish the burden of our debt and also enable us to focus on specific areas like health and education,” Ottoniel dos Santos, Angola’s secretary of state for finance and the treasury, told Reuters, noting that discussions on the deal were progressing.
The IMF’s sub-Saharan regional outlook report, released earlier this week, highlighted that debt-for-development swaps could bolster investment in social development, climate adaptation, and biodiversity.
Ivory Coast and Gabon recently implemented swaps focused on education and nature preservation, respectively. However, the report noted that these swaps remain rare and typically below $1 billion annually on a global scale.
Angola, an oil-rich economy, issued a $1.75 billion eurobond earlier this month as part of its 2025 financing plan. The southwest African country aims to raise $6 billion through debt instruments to meet its total funding requirement of $14.9 billion, according to a finance ministry report.
Luanda faces a $864 million repayment on a bond maturing in November and has borrowed $1 billion via a total return swap with JPMorgan that expires in December. Dos Santos said Angola is still evaluating whether to roll over the swap.
“We are actually working with JPMorgan, but we have not decided yet,” Dos Santos, adding that Angola’s debt-to-GDP ratio had improved significantly, falling from more than 100% in 2020 to 55% today.
Angola is also exploring alternative bond options, such as Panda, Samurai, or Sukuk bonds, to attract investors from Asia and the Middle East unfamiliar with the country’s credit profile.
Dos Santos added that he thought the government now had “enough expertise and confidence to be daring, to tell the Angola story.”
While Angola is maintaining close ties with the IMF, he said financial assistance from the global lender is not currently under consideration. “We are very comfortable with the relation and the support … but we don’t have anything on the table regarding a program.”
(Reporting by Karin Strohecker; additional reporting and writing by Colleen Goko; editing by Paul Simao)
